IT Services: In House or Outsource?

It All Depends(tm).

I'm a little bit biased because I am an outsourced IT provider. I have Customers who are larger and smaller than the company you describe-- some have in-house IT staff and others don't.

I'll apologize in advance if it sounds like I'm trying to "sell" you in this posting. I'm really not. We only service Customers who we can feasibly visit face-to-face, and your profile says "South Carolina" whereas mine says "Ohio". With that in mind, though, I do think that there is a potential situation that outsourcing may work for you (or, it may not).

If you don't get anything else out of my message, take this away: The specific people who are involved, ultimately, will make any arrangement either succeed or fail. If you get an employee or an outsourced provider who genuinely cares about your business, cares about doing you right, and cares about providing the most efficient and cost-effective experience they can you'll have the best luck. Too often employees see their work as "just a job" and don't give their best effort. Too many outsourcing companies are in the business to make money, potentially at the expense of their Customers.

Outsourcing doesn't necessarily mean "a different person ever time". My company, for example, has been the same three people since we started in 2004. Our Customers see the same faces on every visit. Your selection of an outsourcing firm makes a big difference on this issue.

Going with an outsourcing firm that uses a "fleet" of rotating "technicians" (constantly experiencing turnover) isn't going to give you a good experience. Having a "revolving door" position inside your company will accomplish the same poor results.

The labor expense of an employee depends a lot on their level of skill and your job market. In my area, Dayton, OH, US, I'd expect to pay an admin handling, say, server computer hardware, cabling / network infrastructure maintenance, Active Directory, Exchange, PC issues, a company web site (not necessarily the content-- just the hosting relationship), VPN access for remote users, and backup between $35,000.00 and $50,000.00 / year. Benefits and payroll tax are going to be anywhere from 20% to 35% of the salary (depending on your locality), for a "true cost" in dollars of somewhere beteen $42K to $54K on the low-side.

Just remember that an employee costs more than their salary and benefits. You have an opportunity with many outsourced firms to "cross train" multiple "technicians" with your environment. With an employee you're often stuck with nothing when they decide to seek greener pastures.

With our particular firm, $42K can buy a substantial quantity of on-site presence and VPN-based incident response. I'd shop around whatever you expect the true cost of an employee to be to local IT outsoucing firms and see what you come up with. Based on the size of the company you're talking about, and bearing in mind that I know nothign about your line-of-business software (the quality of which DRAMATICALLY affects service labor outlay), I could easily see that after getting over the initial setup hurdles (wresting "Administrator" rights away from users, getting servers / backups / email / etc setup in an optimal configuration) you could settle into a recurring service routine of 16 - 20 hours per week, and possibly even less.

The best arrangement that we've worked in, historically, has been reporting to a semi-technical manager who handles the day-to-day admin tasks (password resets, new account creation, etc), and defers higher-level problems to us. This keeps the day-to-day expenses lower, but still assures that the infrastructure is properly installed and maintained. Since we're a "services only" Firm (and don't sell hardware, software licenses, etc), it's usually easier for our Customers to grasp that we really are "on their side" and really are looking out for their best interests.

Our business model is to get Customers setup with a solid infrastructure that's setup right from the start, proactively monitored for failures, and ultimately configured with the intention of requiring the least amount of ongoing support labor to "keep running". It's perfectly possible to have a network infrastructure that mostly "takes care of itself" and doesn't need a large amount of daily "care and feeding".

Like I said-- I'm probably biased. This is the kind of work that I've done for years and I think it tends to work very well. Ultimately, though, there is no easy answer.

I think the instance above... In House (full/part time) would probably be the way to go. Cheaper, more available, and should get better as the new hire becomes familiar with the system.

The interview would be pretty much a standard IT interview. Try and find the best person for the job basically.

Even if you outsource, you'll likely need a person to liason between the users and the 3rd party.

I'd think about a hybrid model. Get a lower end person who can do the light IT work, password resets, printer jams, unplugged network cables, etc, and prefrom triage on IT issues as they come in. Then look at an outsource for the "heavy lifting": Server Installations, network infrastructure maintainence, etc.

We are somewhat larger than you are, but we have had good luck with a company called All-Covered.